J. Robert Branston

The healthy development of economies: A strategic framework for competitiveness in the health industry

Abstract Applying a strategic decision-making perspective on the economics of business, we suggest that a competitive locality in the health industry is one that, relative to other localities, is effective in: (1) providing the healthcare that enables everyone to participate fully in the democratic development of the locality; (2) providing the healthcare that is democratically identified as a direct objective of this development; (3) contributing through the health industry to any other democratically determined objectives of the localitys development. The paper hypothesizes that strategic decision-making in organizations is an especially significant determinant of the impacts of the health industry. We conclude that: (i) a locality that suffers concentration in the power to determine the objectives of its health industry could not be strictly competitive in that industry; (ii) the first best way to achieve competitiveness in the health industry would be to democratize its strategic decision-making. What this would entail in practice is discussed in some detail.

The case for Ofsmoke: the potential for price cap regulation of tobacco to raise £500 million per year in the UK

Objective A system of price-cap regulation has previously been suggested to address the market failure inherent to the tobacco industry. This would benefit public health directly (eg, by making it extremely difficult for the industry to sell cut-price cigarettes, or use price as a marketing strategy) and indirectly (eg, by reducing the available money the industry has for spending on marketing and lobbying). This paper explores the feasibility of applying such a scheme in the UK. Methods The impact of price-capping is modelled using optimistic and conservative scenarios, each with different assumptions, and using 2009 and 2010 profit data for the major companies selling tobacco in the UK. The models are used to calculate by how much would profit be reduced through the imposition of price caps, and thus, how much revenue could be raised in additional taxes, assuming the end price the consumer pays does not change. Results Tobacco companies enjoy massive profit margins, up to 67%, in the UK. The optimistic scenario suggests a potential increase in UK tobacco tax revenue of £585.7 million in 2010 (£548.4 million in 2009), while the conservative model suggests an increase in revenue of £433.6 million in 2010 (£399.2 million in 2009). This would be approximately enough to fund, twice over, UK-wide antitobacco smuggling measures, and smoking cessation services in England, including the associated pharmacotherapies, to help people stop smoking. Conclusions Applying a system of price-cap regulation in the UK would raise around £500 million per annum (US

Healthy Governance: Economic Policy and the Health Industry Model

750 million). This is likely to be an underestimate because of cautious assumptions used in the model. These significant financial benefits, in addition to the public health benefits that would be generated, suggest this is a policy that should be given serious consideration.

Generating Participation and Democracy: An Illustration from Electricity Reform in Mexico

By weaving together the fields of health economics, industrial organisation and industrial development, this book describes the benefits of promoting a country’s health industry as a way of stimulating its high-technology industrial capacity. The authors illustrate that the development of a country’s health industry not only improves the country’s health status, but also promotes an industry with relatively stable, high-wage employment, creates the potential for exporting goods and services, and produces scientific spillovers that will favourably impact other high-technology industries.

The demand for UK beer: Estimates of the long-run on- and off-trade beer price elasticities

Abstract Privatisation is a fundamental issue for both ‘developed’ and ‘less developed’ countries. Many see it as a requirement for access to a globalised economy, and furthermore imply that countries have no room for manoeuvre when it comes to ensuring that privatisation takes place. However, we would argue that a mere requirement leaves options for how privatisation is to be undertaken. We consider the possibility of an economy developing according to the aims of its people, and correspondingly of a privatisation model that contributes to the nurturing of democratic economies. How this might be achieved in practice is addressed by using the specific case of electricity in Mexico as an illustration. We explore an ownership and control structure that balances different interests. It is envisaged that pension funds could be important, linking investment back to individuals and groups with interests wider than those usually associated with international investors. While this could move towards the guiding principle of democratic control, it would fall short of being fully inclusive. Therefore a more direct incorporation of citizens, through a formal right to participate in strategic decision‐making, is also contemplated. Various governance mechanisms are identified that, with further refinement and positioning in the context of particular cases, might allow effective participation to be realised.

“Strategic Failure” in the Financial Sector: A Policy View

Over the last 30 years, UK beer sales have been falling while the market itself has experienced a dynamic shift from on-trade to off-trade sales. This article provides estimates of the long-run price, cross price and income elasticities, for both on- and off-trade beer consumption. The results shed light on the changing UK beer market, while also having different implications for imposing beer excise duties and the debate on a minimum price per unit for alcohol.

Big tobacco, E-cigarettes, and a road to the smoking endgame

Abstract Analysis of the recent financial crisis has tended to focus upon “market” and corresponding “regulatory” failures. While this provides important insights, it may neglect deeper issues at the root of recent problems. In this paper, we take a broader perspective, drawing upon the stategic choice approach to the theory of the firm (Cowling and Sugden, 1998, 1999). We present a governance-based analysis which emphasises the process of engaging interested “publics” in corporate decision-making processes. We illustrate our arguments with respect to three UK cases – Northern Rock, Bradford and Bingley, and HBOS banks – which each required major interventions by the UK Government and whose recent history reveals significant changes in ownership, governance and corporate strategy. We argue that the current period of reform for these former building societies represents an ideal opportunity to address serious concerns over governance within the financial sector, and we propose a revised mutual solution as one appropriate way forward.

The price of independents: an analysis of the independent power sector in England and Wales

The provision of the extraordinarily deadly product of cigarettes is dominated by a small number of large and incredibly profitable shareholder owned companies that are focussed on cigarettes. The legal duty of their managers to maximise shareholder wealth means that such companies vigorously fight any new public health measures that have the potential to disrupt their massive profit making, and have the resources to do so. Protecting the public health is therefore made a lot more difficult and expensive. We suggest that one way to counter this would be to actively design future tobacco control policies so that tobacco companies face mechanisms and incentives to develop in such a way that they no longer achieve the greatest shareholder value by focusing on cigarettes. A proper tobacco diversification and exit strategy for the shareholders of the profit-seeking tobacco industry would protect the public health by addressing the current addiction to the continuation of the cigarette market. The increasing popularity of e-cigarettes presents a particular opportunity in this regard, and we therefore suggest a possible policy response in order to start discussion in this area.

Tobacco industry strategies undermine government tax policy: evidence from commercial data

Abstract This paper presents a focused analysis of the role of entrants into the electricity generation market since privatisation. It examines subsequent developments in the market and in the industrys structure and performance. The analysis draws heavily upon new information gained from telephone interviews with many of those involved with the so-called “independent power producers” (IPPs), as well as information in the existing literature. Our key finding is that IPP entry has not significantly increased competition and has adversely affected the future viability of the electricity system. We attribute these failures to the very policies that encouraged the initial entry of the IPPs.

Availability and use of cheap tobacco in the UK 2002 - 2014: findings from the International Tobacco Control Project

Objective Taxation equitably reduces smoking, the leading cause of health inequalities. The tobacco industry (TI) can, however, undermine the public health gains realised from tobacco taxation through its pricing strategies. This study aims to examine contemporary TI pricing strategies in the UK and implications for tobacco tax policy. Design Review of commercial literature and longitudinal analysis of tobacco sales and price data. Setting A high-income country with comprehensive tobacco control policies and high tobacco taxes (UK). Participants 2009 to 2015 Nielsen Scantrak electronic point of sale systems data. Main outcome measures Tobacco segmentation; monthly prices, sales volumes of and net revenue from roll-your-own (RYO) and factory-made (FM) cigarettes by segment; use of price-marking and pack sizes. Results The literature review and sales data concurred that both RYO and FM cigarettes were segmented by price. Despite regular tax increases, average real prices for the cheapest FM and RYO segments remained steady from 2013 while volumes grew. Low prices were maintained through reductions in the size of packs and price-marking. Each year, at the point the budget is implemented, the TI drops its revenue by up to 18 pence per pack, absorbing the tax increases (undershifting). Undershifting is most marked for the cheapest segments. Conclusions The TI currently uses a variety of strategies to keep tobacco cheap. The implementation of standardised packaging will prevent small pack sizes and price-marking but further changes in tax policy are needed to minimise the TI’s attempts to prevent sudden price increases.